Richmond Fed’s Manufacturing Index Rose In September.

Richmond Fed’s Manufacturing Index Rose In September.

Index jumps to 29 in September, above consensus 20

The numbers: The Richmond Fed manufacturing index rose 5 points to 29, its highest level on record, the regional bank said Tuesday. Economists had forecast the index to come in at 20, according to a survey by Econoday.

What happened: The gain was led by shipments, which rose 10 points to 33 and new orders, which rose 9 points to 34. The largest decline came from employment, which fell 9 points to 16. The strong Richmond reading contrasts with cooling seen in other regional Fed districts.

Big picture: Despite worries about trade policies, manufacturing activity remains at high levels. Economists think the national Institute for Supply Management factory survey will show a bit of a retreat in September after it hit a 14-year high in August.

What they are saying?: The Richmond region looks a bit stronger than other regions. “The national ISM should come down a little bit but it is still signaling another pretty high reading. It was super high in August,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

Market reaction: Stocks rose modestly on Tuesday ahead of the closely watched Fed meeting. The Dow Jones Industrial Average DJIA, +0.21%  was recently up 32 points to 26,594.  Read More >>